n the environment, while also hedging against rising oil prices and increased regulation regarding emissions.

Costco explains that they are astutely aware of the effect of climate change on their business. Their website claims that,

“Increased U.S. and foreign government and agency regulations to limit carbon dioxide and other greenhouse gas emissions may result in increased compliance costs and legislation or regulation affecting energy inputs that could materially affect our profitability. In addition, climate change could affect our ability to procure needed commodities at costs and in quantities we currently experience.” [2]

Costco aims to reduce the negative effects of climate change and related regulations by reducing energy use and employing renewable energy in both warehouse operations as well as transportation.

Costco is also able to maintain a positive reputation as relatively environmentally friendly through the use of their green initiatives.

Legal:

Costco has relatively few legal issues and threats to contend with in comparison to other industries such as banking and financial services. One of the greatest legal issues applicable to Costco is regulations regarding energy use. As explained in the environmental section, Costco is actively pursuing initiatives and opportunities in order to prepare for upcoming laws and regulations. By performing these initiatives now, Costco is able to proactively ensure compliance with expected upcoming legal requirements.

In addition to energy use, Costco must follow employment law requirements. Costco has a strong reputation for treating employees fairly and has superior employment treatment and compensation in comparison to competitors. This fact helps to ensure that Costco is able to abide by any employment law requirements.